As
Australia’s economy enters its fourth year of slow growth consumers are
increasingly cutting back on spending, triggering perhaps the most
influential event in the Australian tissue and hygiene market in 2011: a
price war between the two major retailers, supermarkets Coles and
Woolworths. Although this led to significant unit price drops across a
range of products, toilet paper was the primary battleground. This led
not only to plummeting unit prices, but also to a change in the long
established hierarchy of toilet paper brands, as Quilton overtook
Kleenex.

Ageing population boosts demand for incontinence
products

Similar to many developed markets, Australia
is experiencing an ageing of its population as the baby boomer
generation reaches old age. This is having a significant impact on a
wide variety of products. It is putting downwards pressure on sanitary
protection, for example, as female members of the baby boomer generation
reach menopause. However, the greatest impact is on incontinence
products, which experienced double-digit growth. This performance was
further stimulated in 2011 by a change in government programmes, which
have driven an increasing number of incontinence sufferers to make
purchases in the retail channel.

As easy as ABC

With
the exception of private label products, the fastest growing company in
tissue and hygiene in Australia is ABC Tissue, particularly its Quilton
brand. While the two major players – Kimberly-Clark and SCA Hygiene –
source and manufacture most of their products within Australia, ABC
Tissue imports tissues in bulk parent rolls and simply converts the
products in Australia. This allows it to undercut the other two major
manufacturers in terms of price while not sacrificing quality – a
business model that has helped the company make significant gains in
2011.

Supermarkets the channel of choice

Supermarkets
represent the dominant channel for tissue and hygiene products in
Australia, but despite price wars between Coles and Woolworths, this
dominance weakened in 2011. The primary reason for this is the growing
popularity of discounter Aldi. This player has gained a loyal following
across a variety of categories, with its nappies/diapers/pants brand
Mamia proving particularly popular.